Live Earnings Updates: Morgan Stanley (NYSE: MS) Earnings Release Before the Bell
Key Points
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Morgan Stanley reports earnings before the bell this morning.
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Revenue is expected to top $16 billion while EPS estimates stand at $1.98 per share.
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We will continue updating this live blog with more analysis if you stay on this page. Morgan Stanley will host its conference call at 8:30 a.m. ET.
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Live Updates
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Conference Call Highlights
- Overall Performance: Described as “durable” with 6 sequential quarters of strong earnings ($2.02, $1.82, $1.88, $2.13, $2.60, $2.13). Integrated firm model delivering through volatility; focus on returns from incremental capital deployment amid constructive regulatory changes (e.g., SLR proposal, potential CCAR reform).
- Market Backdrop: Q2 split—early uncertainty/volatility from U.S. trade policy; later rebound in markets/capital raising. Clients accepting uncertainty, seeking advice; constructive outlook for H2 with resilient markets, active dialogues, and healthy IB pipelines.
- Capital Deployment Priorities: Organic growth in IB (coverage/lending), Wealth (lending/advice), Markets (financing like prime/secured lending). Inorganic opportunities evaluated strictly for strategic fit (high bar due to integration history); focus on client support, business growth, opportunistic buybacks.
- Regulatory/Outlook: Potential reforms as tailwind; CET1 flexibility for deployment. Optimistic on IB recovery (equity UW as leading indicator); NII stable in lower rates (offsets from sweeps inflows, lending growth).
- Q&A Themes: Incremental ROTCE potential (higher profitability via regulatory tailwinds/integration); client repositioning amid volatility; equities/fixed income durability; IM organic focus; lending trends (shift to corporates/sponsors amid regulatory normalization); bank optimization (deposit diversification for growth).
CEO commentary
- On Overall Results and Durability:
“For the quarter, the Firm delivered $16.8 billion in revenue, $2.13 in EPS and an 18.2% return on tangible, completing a very strong first half of 2025, $34.5 billion in revenue, $4.73 in EPS and a 20.6% return on tangible. With 6 sequential quarters of durable earnings, $2.02 $1.82, $1.88, $2.13, $2.60 and $2.13, Morgan Stanley results have a cadence that reflects consistently higher levels of performance as we execute our strategy through different market and macro backdrops.”
- On Strategy and Integrated Firm:
“The results speak to the power of our Integrated Firm and the alignment of the Firm’s leadership team. With the expectation of a more constructive regulatory backdrop, we are intensely focused on generating returns on incremental capital deployment and investing for growth across the Integrated Firm globally.” - On Wealth Management Growth:
“Total client assets across Wealth and Investment Management climbed to over $8.2 trillion, reflecting our scale and gaining ground toward our target to exceed $10 trillion. In Wealth, an excellent quarter. Profits before tax reached a record $2.2 billion on margins of 28% plus. Net new assets of $59 billion were strong despite higher seasonal tax payments. And fee-based flows of $43 billion demonstrate the value of advice amidst the complex environment and support durable growth of recurring fee-based revenues.” - On Investment Banking and Market Outlook:
“While we’re still in the earlier stages of the Investment Banking recovery, the outstanding performance in equity underwriting this quarter is a positive leading indicator. … Looking ahead, we remain constructive on the market environment. Our strategy to raise, manage and allocate capital for clients across the Wealth and Institutional universe is working. Amidst continuing economic and geopolitical uncertainty, we are intensely focused on continuing to deliver outstanding durable results for clients and returns for shareholders.” - On Capital Deployment (from Q&A):
“Incremental capital deployment will range from supporting clients, growing our businesses, opportunistically buying back stock and evaluating inorganic opportunities where there is clear strategic alignment, all through the lens of generating strong and durable returns for our shareholders.” - On Regulatory Environment and Lending Trends (from Q&A):
“I do think that some of the share that we ceded as an industry group at the top, the big banks writ large, the 6 of us, that, in part, was a function of regulatory limitation broadly. And that regulatory limitation may well be normalizing. … I think the ability for the highly capitalized, global investment banks… we’ll be able to get back after that core share around corporate product.”
Business Segment Highlights
Business Segment Highlights
- Institutional Securities (Revenues: $7.6 billion):
- Strong performance in Equities ($3.7 billion, up YoY; record prime brokerage revenues, all-time high client balances; growth in cash and derivatives across regions, especially EMEA and Asia).
- Fixed Income ($2.2 billion; driven by macro products amid hedging and volatility; solid micro with secured lending growth; commodities down YoY).
- Investment Banking ($1.5 billion): Equity underwriting up meaningfully ($500 million, driven by convertibles, follow-ons, IPOs); Advisory down ($508 million); Fixed Income underwriting down ($532 million, due to lower non-investment grade issuance).
- Other revenues: $202 million (down YoY due to lower NII on corporate loans).
- Provisions: $168 million (driven by portfolio growth and weaker macro outlook); net charge-offs $19 million (mostly CRE loans).
- Backdrop: Activity paused in April/May due to U.S. trade policy volatility but rebounded in June; healthy pipelines in M&A (healthcare/tech focus) and IPOs (Americas/Asia balance).
- Wealth Management (Revenues: $7.8 billion, including $292 million DCP):
- Pretax profit: Record $2.2 billion.
- Pretax margin: 28.3% (up toward 30% long-term goal; DCP impacted by ~70 bps).
- Asset management revenues: $4.4 billion (up 11% YoY on higher markets and fee-based flows).
- Fee-based flows: Record $43 billion (excluding acquisitions); fee-based assets: $2.5 trillion.
- Net new assets (NNA): $59 billion (despite $22 billion tax outflow headwind; strong adviser-led and workplace channels).
- Transactional revenues: $1.3 billion (up 17% YoY excluding DCP; strong retail engagement amid volatility).
- Lending balances: $169 billion (up sequentially, driven by securities-based lending; growing household penetration).
- Deposits: $383 billion (up; sweeps stable).
- NII: $1.9 billion (flat sequentially; expected stable in Q3, subject to policy rates).
- Client assets: $6.5 trillion; 20 million relationships across channels.
- Investment Management (Revenues: $1.6 billion, up 12% YoY):
- AUM: Record $1.7 trillion.
- Long-term net inflows: $11 billion (YTD: $16 billion; driven by Parametric customized portfolios, fixed income, and global distribution; strong demand from Wealth clients).
- Asset management fees: $1.4 billion (up on higher AUM).
- Performance-based/other: $118 million (gains in infrastructure funds).
- Liquidity/overlay outflows: $27.3 billion (institutional, partly to markets/CapEx).
Upgrades and Downgrades for Bank Stocks
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Ticker
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Company
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Analyst Firm
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Rating (Unchanged)
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New Price Target (Old)
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Reasons
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C
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Citigroup
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Barclays
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Overweight
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$100 ($95)
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Q2 earnings beat estimates; NII ahead, though fees worse; pointed to 2025 revenues at high-end of guidance, offset by slight expense increase.
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|
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C
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Citigroup
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Morgan Stanley
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Overweight
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$107 ($103)
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High-quality EPS beat; raised guidance; doubled share repurchases to at least $4B in Q3; expects 10% ROTCE in 2026.
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|
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C
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Citigroup
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Piper Sandler
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Overweight
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$104 ($84)
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Increasing EPS estimates post-Q2; story checks all right boxes as a winner this quarter.
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|
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JPM
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JPMorgan
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Morgan Stanley
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Equal Weight
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$298 ($296)
|
Strong 11% EPS beat vs. consensus; raised NII guidance; highlighted potential uses of excess capital, including inorganic opportunities (high bar).
|
|
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BK
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BNY Mellon
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Morgan Stanley
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Overweight
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$101 ($95)
|
11% EPS beat driven by fees and NII; sixth straight quarter of positive operating leverage; early success in platform’s operating model.
|
|
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HWC
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Hancock Whitney
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Piper Sandler
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Overweight
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$72 ($70)
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Strong Q2 driven by ~6% LQA loan growth, enhanced asset quality, and strategic progress with Sabal Trust acquisition.
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|
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NIC
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Nicolet Bankshares
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Piper Sandler
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Neutral
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$140 ($122.50)
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Q2 exceeded expectations via stronger NII (7% PPNR upside); impressive profitability (1.5%+ ROA, mid-teens ROTCE); outlook for low-to-mid-single digit growth, NIM expansion, efficiencies, benign credit.
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|
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VBTX
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Veritex Holdings
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Piper Sandler
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Overweight
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Neutral
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A look at Banks pre-market
JP Morgan (JPM): Up .18%
Goldman Sachs (GS): Up 1.07%
CitiGroup (C): Up .39%
Bank of America (BAC): Up 1.11%
Wells Fargo (WFC): Down .20%
Morgan Stanley Q2 Numbers
Morgan Stanley Q2’25 Earnings Highlights:
• Adj. EPS: $2.13 ✅; UP +17% YoY
• Revenue: $16.8B ✅; UP +12% YoY
• Adj. Gross Margin: 28.0% ✅; UP +100 bps YoY
• Net Income: $3.5B ✅; UP +15% YoY
Q2 Segment Performance:
• Institutional Securities Revenue: $7.6B ✅; UP +9% YoY
• Wealth Management Revenue: $7.8B ✅; UP +14% YoY
• Investment Management Revenue: $1.6B ✅; UP +12% YoY
Other Key Q2 Metrics:
• Adj. Operating Income: $4.6B ✅; UP +13% YoY
• Adj. Operating Expenses: $11.9B ✅; UP +10% YoY
• Effective Tax Rate: 22.7% (vs. 23.5% YoY)
• Book Value per Share: $61.59; UP +8% YoY
• Tangible Book Value per Share: $47.25; UP +12% YoY
• Return on Equity: 13.9%; UP +90 bps YoY
• Return on Tangible Common Equity: 18.2%; UP +70 bps YoY
• Compensation Expense: $7.2B; UP +11% YoY
• Non-compensation Expenses: $4.8B; UP +9% YoY
• Common Stock Repurchases: $1.0B
• Number of Shares Repurchased: 8M
• Average Price of Shares Repurchased: $123.22
CEO Commentary:
– Ted Pick: “Morgan Stanley delivered another strong quarter. Six sequential quarters of consistent earnings – $2.02, $1.82, $1.88, $2.22, $2.60 and $2.13 – reflect higher levels of performance in different market environments. Institutional Securities saw strength and balance across businesses and geographies. Wealth continues to deliver, adding $59 billion of net new assets and $43 billion of fee-based flows. Total client assets across Wealth and Investment Management reached $8.2 trillion. We announced an increase of our quarterly common stock dividend to $1.00 per share with flexibility to deploy incremental capital. The management team is executing across the Integrated Firm, acting as a trusted advisor to clients and driving durable growth and long-term returns for our shareholders.”
Strategic Updates:
– The Board of Directors reauthorized a multi-year common equity share repurchase program of up to $20 billion, without a set expiration date, beginning in the third quarter of 2025.
Earnings Are Out
Morgan Stanley earnings are out – second quarter EPS is $2.13. That’s above Wall Street expectations of $1.98. We will continue providing analysis in this live article.
Still No Morgan Stanley Earnings
We still don’t have Morgan Stanley’s earnings out, but Bank of America’s have been released.
The company beat on the bottom line but slightly missed on revenue. Shares are up 1.5% in premarket trading.
Before Today's Earnings: A Look Back at Q1
With Morgan Stanley about to report its Q2 earnings, let’s look back at some key figures from their Q1 report.
$MS | Morgan Stanley Q1’25 Earnings Highlights:
• Adj. EPS: $2.60 ✅
• Revenue: $17.7B ✅
Q1 Segment Performance:
• Institutional Securities Revenue: $9.0B ✅; UP +28% YoY
• Wealth Management Revenue: $7.3B ✅; UP +15% YoY
• Investment Management Revenue: $1.6B ✅; UP +16% YoY
Other Key Q1 Metrics:
• Effective Tax Rate: 21% (vs. 22% YoY)
• CET1 Ratio: 15.3%
CEO Commentary:
– Edward N. Pick: “The Firm delivered a very strong quarter with $17.7 billion in revenue, $2.60 in EPS and a 23% return on tangible. Wealth added $94 billion of net new assets, bringing the Firm total to $7.7 trillion. Equities had a record $4 billion-plus quarter, which led to strong results across institutional securities. Morgan Stanley delivered returns while supporting clients, buying back stock opportunistically and building $2 billion of capital.”
CFO Commentary:
– Sharon Yeshaya: “The firm produced record revenues of $17.7 billion and EPS of $2.60 with a strong ROTCE of 23%. The results demonstrate the power of advice and supporting clients as the intermediary of capital across products and geographies, particularly during periods of uncertainty.”
Strategic Updates:
– The firm continues to invest in technology and automation to enhance operational efficiency and client service capabilities, while maintaining a disciplined approach to capital allocation amidst market volatility.
Morgan Stanley (NYSE: MS) reports before the bell today. Large financial companies struggled yesterday. Stocks in the Financials sector declined 1.71%. Both Wells Fargo (NYSE: WFC) and BlackRock (NYSE: BLK) saw particularly steep declines after reporting earnings.
Will Morgan Stanley plummet as well? We’ll be updating this live article with analysis after the company’s earnings drop. Let’s take a look at the need-to-know figures Wall Street is watching.
Q2 Earnings Expectations
Here are the key figures Wall Street is expecting when Morgan Stanley’s earnings release:
- Revenue: $16.02 billion
- EPS (Normalized): $1.98
- Book Value/Share: $61.38
- Net Income (GAAP): $3.14 Billion
Key Areas to That Could Drive Today’s Performance
What areas will determine whether Morgan Stanley’s stock rises or falls after today’s earnings release and conference call (scheduled for 8:30 a.m. ET).
- Wealth Management Margins: Last quarter normalized pre-tax margins for Wealth Management came in below their target (30 to 32%). With net interest income (NII) on the decline and exepnse pressures, any continued margin pressure in this unit could cause Morgan Stanley’s stock to sell off today.
- How Significant is NII Pressure: Wells Fargo shares fell yesterday on NII pressure and Morgan Stanley came in below many peers last quarter. If the company sees NII continue to trend down, it could be the primary area Wall Street focuses on today.
- Investment Banking Rebound: Investment banking was a bright spot in the first quarter. If Morgan Stanley speaks bullishly about its pipeline headed into the second half of the year and 2026, that could be a share price catalyst today.
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